Credit Card
interest explained

When you use a Credit Card, you are borrowing money – and will be charged interest unless you repay the full closing balance within the specified period.

How is interest calculated?

The best way to avoid paying Credit Card interest is to pay off your total Credit Card balance by the statement due date every month. If you don’t, interest will be charged to your Account. It is applied to your closing balance at the end of each day and then added up to make the current statement balance1.

If you’re not able to pay off the closing balance of your Credit Card in full by the due date, then aim to pay off more than the minimum amount due to minimise interest charges.

Example calculation

Let’s say the current balance on your bill is $1,500, and your interest rate is 19.95%p.a.*. What is the daily interest charge that will appear as one total sum on your next monthly statement?

What are interest free days?

'Interest free days' simply refers to the time between buying something with your Credit Card and when interest is applied to that purchase. Depending on the Credit Card you have, when you made a purchase and when your payment is due, this can be up to 55 days.

How it works

On some American Express Cards®, you can enjoy up to 55 days interest free on purchases. However, this is based on several important factors, including:

When you made the purchase.

When your statement was issued.

Whether you are carrying forward a balance on your Account from the previous statement period.

There are no interest free days for cash advances or any purchases where you are carrying forward a balance on your Account from the previous statement period.

Do Credit Card interest rates fluctuate?

We may, from time to time, review the interest rate on any of our products. We will make sure that you are notified well in advance if the interest rate on your Credit Card is changing.

Does the interest differ between Credit and Charge Cards?

The key difference between Credit and Charge Cards is that you are required to pay off the entire closing balance if you have a Charge Card and therefore interest will not be charged on your purchases. However, if the amount is not paid off in full a fee will be charged. A Credit Card allows you to carry the payment of the balance over time, with interest applied to the remaining balance.